Construction Forecasts

Recession Cuts 50% of Construction Jobs in Arizona, Nevada and Florida

Construction job losses during the recession range from 53.2% (130,100 jobs) in Arizona to 6.1% (1,300 jobs in North Dakota). Across all states the job loss is 30.5% through January 2010 with a further loss of 64,000 jobs in February and expected job losses for several more months. California (363,600) had the most job losses followed closely by Florida with 333,600 jobs cut. Several large states had relatively small drops in construction jobs. This includes Texas and Pennsylvania with 18.2% of peak construction jobs lost as well as New York with a 15.1% loss and Louisiana with an 8.2% loss. None of these four states had experienced the rapid pre-recession construction job gains that reversed into the 40-50% job losses experienced by the housing boom states.

Construction job losses began 3-4 years ago in most states when the housing boom collapsed. Note that construction activity began to shrink in 2000 in Michigan when the auto industry began to decline rapidly. The construction recession began much later in the mid-south, gulf coast, Wyoming, North Dakota and Pennsylvania. The recession was delayed by energy industry expansion, hurricane rebuilding and the immigration of people and jobs from more expensive states.

The construction recovery will spread from single family homes to most other sectors over the next 6-8 months. Construction employment is projected to begin rising slowly about mid-year. But the construction unemployment rate, now over 25%, will remain unusually high for several years. The 2006 peak employment in the housing boom states will not be regained for many years. But net construction hiring will bring construction jobs back to very near the 2005-07 level by the end of 2011 in those states with relatively slim recession construction job losses.